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(SACRAMENTO) – Attorney General Bill Lockyer today announced his office has reached a proposed settlement with U.S. Smokeless Tobacco Company in a lawsuit alleging the company gave out free tobacco products on public grounds in violation of state law.

U.S. Smokeless Tobacco Co., maker of Skoal, Copenhagen and Rooster brand tobacco, has agreed to an injunction permanently prohibiting the company from giving out free samples of any tobacco product on public grounds in California. U.S. Smokeless Tobacco also agreed to pay $171,000, which will be used to address the harm of tobacco products, and to reimburse the California Department of Justice for the costs of the investigation.

"Free cigarette and smokeless tobacco products inevitably wind up in the hands of children, and studies show that people who start smoking cigarettes or using smokeless tobacco products as children are more likely to become addicted to nicotine than those who start as adults,' Lockyer said. 'This settlement reinforces California's commitment to prevent children from beginning what could become a lifelong addiction.'

California Health and Safety Code Section 118950 prohibits tobacco companies from giving away free tobacco products on public grounds where minors are allowed. The law was enacted after the California Legislature found that free distribution of tobacco product samples and coupons is a recognized source by which minors obtain tobacco products, beginning the addiction process.

The Attorney General's complaint alleges that on two separate occasions in 1999, U.S. Smokeless Tobacco distributed free containers of tobacco to the general public. One violation took place on the Placer County fairgrounds in Auburn; the second occurred on the Alameda County fairgrounds in Livermore.

This is the third successful lawsuit Lockyer has brought against tobacco companies for violating the ban on distributing free tobacco products. In June, a Los Angeles Superior Court Judge fined R.J. Reynolds $14.8 million for handing out more than 100,000 free packs of cigarettes at fairs and other public events. In July 2001, Lockyer settled a lawsuit against Swedish Match North America Inc., which resulted in that company's agreement to pay $375,000.

"Our policy of zero tolerance for this type of conduct continues in California,' Lockyer said. 'If you distribute free tobacco on California's public grounds in violation of the law, you will be prosecuted.'

Under the proposed settlement , U.S. Smokeless Tobacco will pay $150,000 to the Public Health Institute, a nonprofit organization. The Institute, in consultation with the California Department of Health Services, will disburse the funds to projects designed to address the public harm caused by the distribution of free tobacco products on public grounds.

U.S. Smokeless Tobacco also agreed to a permanent injunction that goes beyond the ban contained in state law. The injunction prohibits distributing all types of tobacco products, while state law only covers cigarettes and smokeless tobacco. It also bans product distribution on public grounds where minors are prohibited by law as well as public grounds that have been leased for private functions and at which a security guard is posted to keep minors out. State law allows free tobacco distribution in those situations.

A copy of the proposed settlement and additional information is available on the Attorney General's website at www.ag.ca.gov/tobacco. The settlement is scheduled to be reviewed October 29, in Placer County Superior Court, Department 2. Members of the general public may comment on the proposed settlement prior to the court finalizing it by calling the Attorney General's Tobacco Litigation and Enforcement Section at (916) 565-6486, writing to the Tobacco Litigation and Enforcement Section at P.O. Box 944255, Sacramento, CA 94244-2550, or by sending an e-mail from the website at www.ag.ca.gov/tobacco/contact.php.